Gold is trading down a second week after hitting a five-month high in November. Meanwhile, gold ETF holdings witnessed inflows, as assets in SPDR Gold Shares rose to 993t from 985t the previous week. Analysts Tapan Patel and Pablo Piovano evaluate the developments in the market, and we Cryptocoin. com to our readers.
“We expect gold to trade downward on the horizontal line next week”
Most commodities in the non-farm segment witnessed sales last week, with commodity prices trading lower, with crude oil falling the most. Meanwhile, base metals have witnessed additional pressure on China’s growth concerns and the strengthening dollar.
Gold prices traded after reporting a second week decline after hitting a five-month high in November, while precious metal prices fell as the dollar strengthened, driven by the Fed’s hawkish stance and speculation about an earlier rate hike, according to analyst Tapan Patel. However, it seems that Fed policymakers are open to a faster end of pandemic-era stimulus in response to accelerating inflation.
The dollar index (DXY), hovering close to the 16-month high of 96.09 this week, while the 10-year US Treasury bond yields fell to 1.48% last week. Stock indices fell amid renewed virus concerns in Europe and fears of new variants in South Africa. The analyst states that this situation limited the downward slump in gold prices on Friday. Traders and investors will await the outcome of the US FOMC meeting for any hint of a rate hike. The analyst draws attention to the following technical levels:
Spot gold prices have resistance at $1,833 and support at $1,780. We expect gold prices to trade sideways down in the coming week.
Gold technical analysis: remains supported around $1,780
Open interest in gold futures markets rose nearly 1.9k contracts on Friday, after six consecutive days of declines, as preliminary data from CME Group shows. Along the same lines, market analyst Pablo Piovano notes that volume has increased by about 65.8k contracts, reversing two consecutive daily pullbacks. The analyst makes the following assessment:
Gold prices extended their positive performance on Friday amid increased open interest and volume, all suggesting that extra gains are emerging on the channel line in the very near term. However, the precious metal is currently targeting the $1,800 mark, which is its key hurdle, with reasonable competition in the $1,780 region.
